The liberalization of telecommunications, both in Western Europe and Eastern Europe and CIS, has brought with it increasingly competitive markets. In the near future, subscribers in any of these countries might find themselves targeted by, or procuring services from, providers in any European country. In this environment, basic services that everyone offers (caller ID, Voice mail.) give no competitive advantage to the provider. Specifically tailored micro services, however, which are possible with newer “soft switch” systems, will give providers powerful revenue-generating tools.

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Few people would say that telecommunications liberalization across Europe has been quick and easy and that all the obstacles have been overcome. In many respects, the difficulties encountered are common to both Western and Eastern Europe. While progress is slower than anticipated, both regions are opening up their telecom markets and it is inevitable that the two markets will blur and merge. This merging may eventually mean that a consumer living in, say, Hungary will one day be able to select a service provider or telecom service from anywhere in Eastern, Western or Central Europe – or beyond. In Western Europe it is generally thought that voice and data communication will eventually be based entirely on Internet Protocol (IP). Indeed, the build-out of these next-generation networks is already underway. If the trend of Western European investment in Eastern European telecommunications continues, bringing with it new ideas and technological innovation, then it could be that in the future all European telecommunications will be IP-based. As liberalization continues in Eastern Europe and as IP networks become more widespread competition amongst service providers will undoubtedly increase. While this is great news for consumers who will be inundated with choice, service providers will need to differentiate themselves by identifying services that customers truly value, and increasingly these will require custom-built development. In Western Europe liberalization has led to a leaner, more competitive, brave new telecom world that has quickly revealed a new market-survival truth: innovative value-added services in both the wire line and wireless worlds will supplant bandwidth muscle as the driving factor behind success or failure. As a result, a new class of customized, targeted communications, known as ‘micro services’, will drive the market over the next decade, changing the way business gets done, the way individuals interact with their communications services, and the way carriers create and roll out new offerings. ‘Macro’ Services No Longer Differentiate Europe has seen baseline ‘macro” services – such as call waiting, caller identification, three-way calling and voice mail – that target the masses flourish, presenting service providers with additional revenue sources. However, the more mainstream these ‘macro’ services become, the more trouble consumers have telling the difference between one carrier and the next. The call waiting service available from the incumbent carrier sounds and costs about the same as the call waiting service offered by the new market entrant, which is not much different to the service provided by the wireless carrier. This fact greatly and obviously diminishes both customer loyalty to a carrier and the revenue potential that a customer offers. The repercussion of this for carriers in Western Europe has been the need to think and move in another direction – from widespread and generic services to target and specific ‘micro services’. Micro services Defined Micro services are by definition custom IP-based services offered by wire line and wireless carriers to meet the needs of specific market segments. By identifying smaller, more narrowly defined demographic or geographic groups – ‘communities of common interests’ – carriers, third parties and vendors can create customized micro services that can be quickly and economically ‘macro’ service can capitalise on a micro services approach by creating virtual focus groups and test beds within their user bases. A micro services approach makes it easy and economical to roll out a new service to a segment of the customer base and test its staying power. If it is a hit, the carrier can roll out the service to a larger group. If it is a miss, it is much easier to phase it out. This is in stark contrast to the investment and restrictions of “en masse” new service roll outs dictated by the public switched telephone network (PSTN). Business First Business or enterprise customers are the most likely targets for initial micro service offerings, because they are always on the hunt for tools to improve efficiency, productivity and profitability. In fact, though still in their infancy, several business-focused micro services are already available in Western Europe. These deployments include applications that provide: phone service integrated with access to corporate databases; virtual calling circles of parties within and outside a company set up on a permanent, temporary or one-time basis; ‘on-the-fly’ conference calling; presence-based call treatments (also known as ‘polite calling’) and to some extent, unified messaging. These technologies are new, but early adopters are already proving their worth by deploying the services and creating the foundations for subscriber growth and customer loyalty. Through these early commercial deployments, carriers are also gaining experience and understanding about how to build reliable, scalable services with the characteristics that keep customers coming back for more. To illustrate how a micro service can solve a problem for a particular ‘community of interest’ it is useful to look at a business scenario that could be found in any part of the world. Consultant time-logging application A firm of consultants wants to track all contact with their clients, whether incoming or outgoing, so that the billing of a consultant’s time can be accurately invoiced to their clients. The consultants however are increasingly mobile and are using their mobile phones as often as their desk phones to make and receive calls. “In Western Europe it is generally thought that voice and data communication will eventually be based entirely on Internet Protocol (IP). Indeed, the build-out of these next-generation networks is already underway.” The service provider’s micro service solution is to provide a call logging application combined with a database query, Web POP and Interactive Voice Response (IVR) server that allows incoming and outgoing calls to clients to be logged. For outgoing calls, the consultants have short code dialling programmed into their desk and mobile phones that takes them to the IVR server. The consultant is then prompted by the IVR server for the client to be called. Incoming calls are based on a ‘one number’ service hosted by the service provider. The consultants never give out the actual numbers of their mobile phones, but instead have a ‘find me/follow me’ service which allows them to tell the systems in which order to try their various phones, and if they cannot be contacted by phone, to send the call to voicemail. The one number service automatically checks incoming calls and compares the number with the client database. If there is a match, the call duration is logged against the client. If there is no match the system prompts the consultant to identify the client. While this is a simple description it emphasizes how micro services can be used to provide a customized service and solution to a specific business need. The micro services approach has the potential to drive innovation in the telecom space, opening new doors for revenue generation. Potential microservices include: o IP intercom – Provides users with the ability to access their ‘buddy list’ from a handheld device such as a phone or PDA and communicates with others in real time; o Conference-on-the-fly – Enables users to have a sidebar conversation with other individuals while attending a conference call, whether or not the other users are participating in the conference call; and, o Instant video streaming – Provides users with the ability to stream video to and from their handheld device (such as a phone or PDA). Soft switch – The Heart of Next-Generation Service Provision The IP-centric nature of next-generation networks, and the critical role of the soft switch in these networks are two key factors in making this microservices approach a reality. In the legacy PSTN, Class 4 and Class 5 switches were responsible for a multitude of functions: call control, call processing, signalling, applications and services. All of these functions were locked inside a single monolithic platform. Service development and creation in the circuit-switched environment were time consuming, costly and risky. The soft switch changes that by providing a logical deconstruction of the traditional PSTN switch. Decoupling, or separating, the media processing functions from call control, signalling and applications allows for more openness and creativity in the carrier’s network. This new network architecture is divided into three tiers: Tier 1 is the call control layer, where media gateways accommodate traffic from a variety of access media – including wired, wireless, narrowband and broadband. Tier 2 bridges different signalling and call control protocols, enabling service providers to integrate PSTN and IP networks, and to seamlessly integrate traffic from networks using disparate protocols. Tier 3 focuses on application and service creation, providing an open environment for interconnection of application servers that enable rapid service customisation and deployment; this greatly simplifies the targeting of small, medium and even large groups of customers. “The mircoservices approach has the potential to drive innovation in the telecom space, opening new doors for revenue generation”. None of the functions of the soft switch are new, but they bring open standards-based distributed network architecture to telephony. This ‘openness’ promises not only reduced cost but also increased ability to create innovative new services that harness Internet-style creativity. This liberates service providers from the ‘lock-in’ of proprietary technology where historically they have had to go back to the original vendor in order to add any services. In these next-generation networks the service developers can work with open application programming interfaces (APIs), enabling a greater population of software programmers to be engaged either directly, or through third-party developers. It is the deployment of a soft switch framework within the IP network that actually enables carriers to rapidly create applications in a microservices scenario. Widely acknowledged as fundamental to next-generation networks, the soft switch performs intelligent call handling between IP devices and integrates with the PSTN through media gateways, as represented by Figure 2 below. “IP intercom provides users with the ability to access their ‘buddy list’ from a handheld device such as a phone or PDA and communicate with others in real time.” Conclusion As service providers in Western Europe continue to migrate to IP-based networks the reality of microservices will come to the fore. Customers will experience a whole new level of control previously impossible in the circuit-switched system, while carriers will be able to differentiate themselves via flexible service creation that provides cost savings and targeted revenue sources. As liberalization gathers momentum in Eastern Europe, encouraging a more competitive telecom marketplace, there will be an uptake of next-generation networks. The dawning of this new era across Europe as a whole brings with it exciting new prospects for service creation and revenue generation. Microservices are a taster of what the future will hold for telecommunications. The only questions remaining are : which service providers will have the foresight to make the leap and how long will it take?